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Metcalf Foundation study: working poor numbers way up in Toronto

Experts say that if the numbers of working poor in Toronto increased from 2000 to 2005, a boom period, the situation has likely worsened.

Single father Hussin Butoyi, of Scarborough, who works in a used clothing warehouse for $10.50 an hour, is among Toronto's burgeoning numbers of working poor. (RICHARD LAUTENS / TORONTO STAR) | Order this photo

By Laurie MonsebraatenSocial Justice Reporter

Sat., Feb. 11, 2012

The legions of Toronto area workers pouring coffee, cleaning toilets and otherwise toiling for low wages in office towers and factories is growing dramatically.

Between 2000 and 2005, the area’s working poor grew by 42 per cent, to 113,000 people, according to a groundbreaking report based on Statistics Canada labour and income data.

Across the region, they accounted for 6.4 per cent of the working-age population. But inside the city of Toronto, they surged to 8.2 per cent of the workforce, or 70,700 people, says the study by the Metcalf Foundation, released on Saturday.

“Working many hours and holding full-time, year-round employment is no longer a guarantee of escaping poverty,” says the report, entitled: “The ‘Working Poor’ in the Toronto Region; Who they are, where they live, and how trends are changing.”

“It is a problem that is simultaneously political, social, locational, and economic,” the report says.

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According to the report, the region’s working poor are almost twice as likely to be employed in sales and service jobs than the rest of the working-age population, and they work just as much.

Almost three out of four are immigrants, and almost half are single or lone parents. More than half have some post-secondary education, about the same as the average Canadian worker.

Almost 60 per cent are renters, and more than 60 per cent are between the ages of 18 and 44.

Bear in mind that this was the picture during the region’s boom times.

Although StatsCan income data for 2011 isn’t yet available, the situation has likely worsened, says economist Armine Yalnizyan of the Canadian Centre for Policy Alternatives.

“It gives us an idea of what was happening in the best of economic times when the country was in the middle of the strongest growth spurt since the 1960s,” she says.

“It begs the question: where do we think the next middle class is going to come from? How do we think our economic strength is going to survive without a middle class?”

The report’s message to immigrants is particularly chilling, she adds.

“With our aging population we’re going to be relying on immigrants more than ever before,” she says. “If this is what awaits them in the Toronto area, they are going to go elsewhere, and that is going to have a profound effect on our local economy.”

The report should be a warning to government, says Deena Ladd of the Workers’ Action Centre, a non-profit workers’ collective.

“It shows that the issue of wages and working conditions as they are connected to the working poor really needs to be looked at.

“Are we going to continue growing the service-sector jobs,” she adds, “or are we going to have innovative strategies by the government that lead to decent jobs that have good wages, good benefits where people can take care of their families and save for the future?”

Although the term “working poor” is commonly used, the lack of a widely accepted definition has made it difficult to study this group, says social policy expert John Stapleton, who wrote the report with StatsCan analysts Brian Murphy and Yue Xing.

The report’s new definition is robust and conservative, he says.

It defines the working poor as people between the ages of 18 and 65 living independently and earning more than $3,000 but less than the low income measure (LIM), defined as 50 per cent of the median income. The category excludes students.

By that measure, a single person earning less than $17,281 after taxes in 2005 was considered working poor. In today’s dollars, the threshold would be about $18,500.

For a single parent with one child, it would be about $26,000 today.

According to the report, the vast majority of the region’s working poor live in Toronto’s inner suburbs, where most of the city’s low-income housing is concentrated.

More of them live east of Yonge St., a trend that increased between 2000 and 2005. The researchers say they do not fully understand this phenomenon.

Regent Park was the only downtown neighbourhood with a very high concentration of working poor in 2000, the report shows.

By 2005, Flemingdon Park and Thorncliffe Park were added.

““Although the city of Toronto has the highest rates of working poverty right now, it is a fast-growing phenomenon in the region,” the report says. “We need to know more about that too.”

By plotting the working poor by census tract over time, the report shows where these people live and how their situation has changed.

It provides a platform for further research into the problems associated with working poverty, it adds.

Stapleton says more research is needed to determine if the rise in working poor is due to people losing good jobs for more precarious employment or because people are leaving welfare for work and actually improving their situation.

Conversely, when working poverty goes down, it may not mean people are getting better jobs but instead reflect an economic climate where more people are falling into welfare.

“There is a fair bit of ambiguity around the rise and fall of working poverty,” Stapleton says. “Is it a good news story or a bad news story? We just don’t know yet.”

By shedding new light on this relatively hidden group, the researchers hope to spark further study on how to protect working-age people from poverty, how to rein in the growth of precarious, part-time and low-wage jobs, and how to ensure that higher education leads to better employment.

The authors also hope other researchers will plumb the data to learn more about the demographic makeup of the working poor and whether immigration status, gender or race impede people’s ability to work their way out of poverty — and whether newcomers and lone mothers are overrepresented among the working poor.

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